Interest payments on Air Travel Trust fund dwarf company failure payouts

Interest payments on the overdrawn Air Travel Trust fund dwarfed pay outs for company failures in the last year of bonding for ATOL-protected firms.

The fund paid out just £374,000 in the year to the end of March, despite total payments of more than £5.3 million to cover refunds and repatriation of clients of failed travel firms. Interest payments were close to £1 million.

The remainder of the bill was paid out of bonds, demonstrating the robustness of the old system for which the ATT fund acted as a back up.

A £1 ATOL Protection Contribution on sales replaced the bonding system for most companies in April, although a small number of firms and new industry entrants still require bonds.

Twenty-five companies failed over the period, two down on last year but the same as the previous year. However, a single failure – that of Tapestry Holidays – in August 2006 cost the fund £2.5 million.

In the past year only three companies, Go4 Hajj & Umrah Tours, Oasis Tours and E-4 Events, appear to have been severely under-bonded. Go4 Hajj, which ceased trading in January and held a bond for £22,000, cost the fund £207,000.

Oasis Tours, which failed in November, cost the fund £90,000 and E-4 Events £20,000.

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